Sounds to me like you have good news and bad news:
Good news: Someone probably saved you the time, effort, and money and installed a part time kit, already (or, your QT Dif is toast, my money is your are already part time).
Bad news: In order to get into 4WD, you HAVE to get your vacuum shift motor working.

You can replace the shift motor without pulling the whole transfer case, but you have to open up the case, to do so. That means a couple hours, on your back, laying in ATF as it drips on you/down your arms while you work. It is not hard at all and totally worth doing it yourself. You said you already applied vacuum to both nipples (at the shift motor) and neither one of them held vacuum, right?

That will not work, diaphragm is bad so rod will not move, sounds like you have a part time kit if you have the locking hubs up front, good. you can remove the top cover and manually move the shift fork forwards or backwards but will need some access to get to it as it is on top above the vacuum diaphragm. I would look into doing the cable shift conversion as the diaphragm is getting expensive to replace.

That will not work, diaphragm is bad so rod will not move, sounds like you have a part time kit if you have the locking hubs up front, good. you can remove the top cover and manually move the shift fork forwards or backwards but will need some access to get to it as it is on top above the vacuum diaphragm. I would look into doing the cable shift conversion as the diaphragm is getting expensive to replace.

I like the cable idea. Any good threads on here for home made or off the shelf conversions?

I have seen kits for CJs with Quadratrac, I assume it would work or could be modified to work. The kicker is they are like $150 and don't want to waste my money.

From my experience, there really is no other way to remove and install TC parts. Removing it and the drive lines from the wagoneer was the only way for me.
You really need to consider if doing all this work for the benefit of having E-drive is worth it. For me, the answer was simple. I did it.
Being a 79, the transfer case and all of its components and chain were not worn or stretched out of limits. I got lucky.
I now have E-drive and I just used it this morning in the snow. My low range works as well.
But NEVER EVER will I take it out on the trails and hammer the dog snot out of the TC. I treasure my chain.
Knowing how hard it was to remove and install the TC and both drive lines (by myself), it will be a miserable day if I ever have to do this work again.

Without shifting the transfer case, even with locked hubs, you cannot get power to the front axle. If you lock your wheel hubs, that is locking the wheel to the drive axle which is connected to the front drive shaft, and the driveshaft will spin when driving but you are not applying power to the front wheels. Shifting the transfer case is what connects the transmission output to the front drive shaft, via the lower sprocket in the case.

On a traditional QT, the power goes out the trans, into the reduction gear (if you have one), to the upper sprocket, through the chain to the QT lower sprocket and to the front/rear axles. This lower sprocket has a sort of limited slip in it so it provides power to both axles all the time but allows some slippage so you can turn on drive pavement without binding up your tires (All Wheel drive). When you select E-Drive, it locks the front and rear outputs together and it is no longer able to slip between the front and rear axles (4WD). That's why you shouldn't really drive with it on dry pavement.

With a PT kit, you remove that lower sprocket and replace it with one that does not send power to the front axle all the time. So that means power leaves the trans, go through the reduction gear (if you have one), to the upper sprocket, to the new lower sprocket and ONLY to the rear axle turning your truck into a 2WD. This is why you can spin the front driveshaft even if you are in park (if the hubs are both unlocked). Then when you select E-Drive, it locks the 2 axles together, making your truck 4WD.

I don't mind the vacuum shifter. I paid big bucks for a NOS one too (I bought one from the dude on ebay but i think i paid $70 at the time) but there are plenty of originals out there that still work so I figure if they last this long, mine will outlast me.

Thanks guys for the info!
I will update you after this weekend as to what i find out on mine.

Driftwood, as for doing all the other stuff to the TC, my hope was to do this without pulling it out of the Wagon. If it comes to pulling the TC out I will wait and do a proper rebuild at a later time, I have so many other things to tackle first, 4WD is not mandatory right now it drives as is. The other stuff I'm working on will allow me to still drive the Wagon while I do it. Sounds like I just need to dive into this and see what I have/need.

That being said, I am for sure saving that link to the cable conversion. That is exactly what i was looking for. Thanks guys!

Over the last weekend I didn't do much, except get the 401 I picked up out of the back of the Wagon and on a stand.

Here it is in the rig with all the other stuff I picked up. Good thing these Wagons have a ton of space.
Cleaned out all the stuff around the engine, components, front bench seat, drivers fender, windshield, and misc parts.
Now we had 4 guys to push it into the Wagon and over the rear axle, at home we had 2. So with some redneck engineering we pulled the engine to the back to be able to grab it with the engine lift.

Thanks!
I plan on pulling a few things off to investigate how it looks, but if she looks okay internally, I will just clean it up and run it as is until the wife approves a whole rebuild similar to Rang-a-stangs 401. I want a decent driver, that we could take road trips in. (Road trips stopping at every gas station)

The main goal of the day was to install a new water pump on the 360 that is in the rig. This was successful but took way longer then expected. I had so much crude built up in there it was amazing it ran as good as it did. So i did the poor mans engine flush with a good garden hose. Re-installed the new water pump and old alternator and power steering brackets.
Before:
After:

Second goal was to then fix all the vacuum leaks i have going on, (this has been on going since i got the vehicle), so i broke out the starting fluid and starting spraying, but i finally stopped so many that i had to time the engine! Yes you heard me right, it was running so bad with all the vacuum leaks that the timing had to be WAY advanced to even idle. So with all the vacuum leaks stopped minus changing the intake manifold gasket and setting the timing she purrs like a kitten now. (Intake Gasket next weekend)

Lastly on the goals list was to investigate my 4WD/E-Drive, I did crawl under the Wagon, with it in park I can freely spin my front drive axle, so it appears to have had a part time kit installed with the locking hubs. My vacuum lines to the vacuum actuator have been severed since i got the rig. (mis-spoke before, I "thought" i tested the vacuum actuator but was not able to get vacuum on either side, this being because the lines were severed. I also was not able to get to the vacuum actuator under the Wagon so I began removing the access panel in the floor.---That is as far as i got.

One more item is to start going through the dash wiring, currently the only functioning thing in the dash is the speedo. I will be pulling the gauge cluster and climate controls to inspect it this weekend also. If anyone has pointers on doing this please send them my way!

This forum is full of posts like this:
Poster: My truck always overheats [or overheats on the highway, or overheats when on the street]. i don't know why
Replier: Do you have a stock fan and fan shroud?
Poster: Nope, but I do have a new radiator, flushed the system, and a new TStat
Replier: you need a stock fan and shroud.
Poster: Woa! I put a stock fan and shroud on and now my truck NEVER over heats!!!

You can rotate the E-Drive vacuum motor in the case so you can get access to the vacuum nipples. You may not need to pull it. If you put vacuum on one nipple and it holds, then you put vacuum on the other and it holds, you may be good. IMHO, it is easier to work on the case in the rig: drain it, check your chain slop (use the link someone else gave you in the other thread on how to check chain slop), remove the shift lever from the low gear unit (if you have one), remove the 5 bolts holding the low gear unit, remove the low gear unit, remove the big C clip inside the planetary that is poking out from where your low gear unit was, remove all the bolts that hold the case together and open up the case. This will leave both sprockets and chain in the case. The motor can then be replaced from the case half you just dropped. You can spray the case out with brake fluid cleaner, etc.

Just make sure you have a huge piece of cardboard under you becuase it drips ATF. BTW, with a part time kit, you can run ATF in your case instead of the speacial QT fluid.

This forum is full of posts like this:
Poster: My truck always overheats [or overheats on the highway, or overheats when on the street]. i don't know why
Replier: Do you have a stock fan and fan shroud?
Poster: Nope, but I do have a new radiator, flushed the system, and a new TStat
Replier: you need a stock fan and shroud.
Poster: Woa! I put a stock fan and shroud on and now my truck NEVER over heats!!!

You can rotate the E-Drive vacuum motor in the case so you can get access to the vacuum nipples. You may not need to pull it. If you put vacuum on one nipple and it holds, then you put vacuum on the other and it holds, you may be good. IMHO, it is easier to work on the case in the rig: drain it, check your chain slop (use the link someone else gave you in the other thread on how to check chain slop), remove the shift lever from the low gear unit (if you have one), remove the 5 bolts holding the low gear unit, remove the low gear unit, remove the big C clip inside the planetary that is poking out from where your low gear unit was, remove all the bolts that hold the case together and open up the case. This will leave both sprockets and chain in the case. The motor can then be replaced from the case half you just dropped. You can spray the case out with brake fluid cleaner, etc.

Just make sure you have a huge piece of cardboard under you becuase it drips ATF. BTW, with a part time kit, you can run ATF in your case instead of the speacial QT fluid.

Thanks for the quick run through.

Can you get to the Vacuum Actuator from underneath?
Or do you have to get to it from the floor?